Chemical Tankers Market Trends

Growth Drivers

• Growing Trade of Oils – Chemical tankers transport a variety of industrial chemicals and can also clean petroleum products if configured as oil and chemical tankers. Global oil consumption is expected to reach 104.1 million barrels per day by 2026. This would imply a 4.4 mb/d rise over 2019 levels.
• Rising Production of Chemicals - Chemical tankers are specially designed to transport a wide range of liquid chemical cargoes. The bulk liquid chemicals, acids, edible oils, alcohols, biofuels, and clean petroleum products handled are the most complex. Owing to the complexities of these compounds, zinc-coated or stainless-steel tanks, advanced vessels, and qualified personnel capable of handling sometimes hazardous, combustible, or corrosive ingredients are required.   Ammonia, the building block of all synthetic nitrogen fertilizers, has grown at a pace of 1.6 % yearly over the last decade, globally. Today, China is the top producer that accounts 28% of global output.
• Increasing Chemical Industry –The chemical industry is growing rapidly, driven by rising demand for chemicals and chemical-based products. These products are used in various sectors, including, pharmaceutical, plastics, consumer goods, and agriculture. Owing to this demand, the need for chemical tankers is also increasing.  According to the European Chemical Industry Council, the industry rose from around USD 2 trillion to nearly USD 4 trillion between 2009 and 2019, and it was in good form prior to the epidemic. The chemical industry experienced a 0.4% dip in 2020, and the following year enjoyed a fast comeback that lasted until the commencement of Russia's conflict in Europe.
• Growing Export of Chemicals –When exporting chemical products, chemical tankers are used to transport these substances from the country of origin to the destination country.  In response to rising pricing, EU chemical (including pharmaceutical) extra-EU exports hit a record high of USD 550 billion in 2022. This represented a more than 21% rise over the value of exports in 2021 which is USD 450 billion.

Challenges

• High cost of operation- the transport of chemicals, especially that are hazardous are subjected to string environmental regulation, which is likely to increase the operational cost of these chemical tankers.  Moreover, these regulation changes frequently and depend from nation to nation, therefore sticking to these, regulation becomes difficult, and non-adherence to these regulations can also lead to hefty fines.
• Volatility of chemical markets
• High cost of advanced chemical fleets